Reformed fitness test - credit competence

We must be satisfied that applicants for credit licences are fit to engage in the credit activities identified on the licence application. Once a licence is granted the holder must maintain this standard of fitness.

When considering fitness we can take into account any circumstances that we think are relevant. For example, we consider any evidence that tends to show that an applicant or licensee has been convicted of fraud, dishonesty or violence or has engaged in deceitful, oppressive or otherwise unfair or improper behaviour.

From 6 April 2008 we can also take into account credit competence. This means the skills, knowledge and experience in relation to each credit activity and also the business practices and procedures, which you have in place or intend to implement in order to ensure that your business complies with the relevant legislation. We may ask you for more information relating to your competence, depending on the credit activities you want to engage in.

Applicants for the debt collection and debt management categories will need to complete a Credit Competence Plan (form CCP1). This focuses directly on evidence of competence.

Applicants for high-risk lending, broking, debt administration, and credit reference agencies will need to complete a Credit Risk Profile (form CRP1).

The information we gather from the application form and other forms will assist us in deciding whether to request on-site visits by LATSS and whether to issue a licence with or without Requirements.

We published revised fitness guidance on 7 January 2008. The revised guidance outlines how we will decide whether someone is fit to be licensed and the way we propose to exercise our new powers under the Consumer Credit Act 2006. For more information, see the guidance on fitness and requirements (pdf 147 kb).

If there are any queries these should be addressed to credit.guidance@oft.gsi.gov.uk.

Back to: Consumer Credit Act 2006